ELI5: Explain Like I'm 5


Futures are agreements between two people or companies to buy or sell something at a future date and for a specific price. They're like contracts that people use when they want to make sure that the prices they buy or sell something for will stay the same, even if the price changes in the future. For example, a farmer and a grocery store might agree that the farmer will sell the store their corn in six months at a specific price. This way, the farmer knows they will get a certain price for their corn, and the store knows that the price of the corn won't jump up if something happens that causes the price to go up.